Chinese Outward Foreign Direct Investment in Africa

Abstract

China has rapidly expanded outward foreign direct investments through its remarkable economic growth and the ‘go global' policy. The country has extended aids to developing countries particularly in Africa. The Chinese approach for aid in the region is built on the principles of unconditionality, which do not explicitly require political openness, strong economic and management practices, good human rights performance, or environmentally responsible policies on the part of recipient governments. Such principles are welcomed by the African states. However, their overall successful development is linked to the long-term substantial institutional reforms. This chapter addresses the rising debates on the Chinese approach to aid and investment in Africa. The chapter includes discussion on the political economy of China and its motivations for investment in the continent, the bargaining process for investment opportunities between the two governments, and the dilemmas of Chinese engagement in Africa. Implications for managers and policy makers are provided in the last section.

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